Reuters / Brendan McDermid
- US equities gained on Tuesday on new hopes for a capital-gains tax cut and wary optimism about a Russian coronavirus vaccine.
- President Donald Trump said on Monday afternoon that he was considering lowering the US capital-gains tax. Such a move would increase investors’ realized profits but would likely face legal challenges if done through an executive order.
- Investors also mulled Russia’s announcement that it had developed and approved the world’s first successful coronavirus vaccine. While news of vaccine progress has previously lifted markets, the lack of phase-three testing of the vaccine has made several health authorities skeptical of its safety.
- Oil gained after US COVID-19 hospitalizations sank to their lowest level in a month. West Texas Intermediate crude rose as much as 2.4%, to $42.94 per barrel.
- Watch major indexes update live here.
US stocks rose on Tuesday after President Donald Trump called for a capital-gains tax cut.
The president said on Monday afternoon that was considering lowering the US capital-gains tax, a move that would boost investors’ realized profits. Trump decided against such a cut in September, saying it did too little for the middle class.
While the president can’t unilaterally slash the capital-gains tax rate, he could adjust it by the level of inflation through an executive order. Still, such a move would likely prompt legal challenges.
Here’s where US indexes stood at 11:25 a.m. ET on Tuesday:
- S&P 500: 3,377.46, up 0.5%
- Dow Jones industrial average: 28,106.66, up 1.1% (315 points)
- Nasdaq composite: 10,971.00, up 0.03%
In vaccine news, Russian President Vladimir Putin said on Tuesday that the country had developed and approved the first successful coronavirus vaccine. Futures moved higher after the announcement, though global health authorities have expressed skepticism about the vaccine’s safety.
Clinical trials of the vaccine took place over just two months, and the Russian government approved its use before phase-three studies, set to begin on Wednesday.
“I know that it works quite effectively, forms strong immunity, and, I repeat, it has passed all the needed checks,” Putin said on Tuesday, according to Reuters. The president added that one of his daughters received the vaccine.
Investors also cheered news that US COVID-19 hospitalizations fell to their lowest level in a month, suggesting the country’s surging death toll could soon slow.
Inovio Pharmaceuticals tumbled after missing quarterly estimates. The company also announced that the next trials of its experimental coronavirus vaccine would begin in September, later than expected.
The Chinese electric-car maker Nio erased initial gains as the company’s earnings beat drove a wave of profit-taking. The Tesla competitor beat second-quarter expectations and posted a positive gross margin for the first time ever. Nio also guided for record revenue and vehicle deliveries in the third quarter. Yet the largely positive report wasn’t enough to fuel gains, as stronger-than-usual selling pushed shares into the red in the first 30 minutes of trading.
Oil futures climbed as the falling US hospitalizations boosted hopes for a demand rebound. West Texas Intermediate crude gained as much as 2.4%, to $42.94 per barrel. Brent crude, the international benchmark, jumped 1.8%, to $45.78 per barrel, at intraday highs.
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